US Senators Agree to Extend Debt Ceiling to Avoid Default
https://www.bbc.com/news/world-us-canada-58835517
The United States currently has a large deficit and in order to combat it has set a debt ceiling. Recently, the government has been threatening to default, which would cause the global financial system to spiral and put the US into another recession. The debt ceiling limits the amount of money that the government can borrow to bridge the gap between the amount of taxes it collects and the amount it needs for government programs.
Recently, the Republicans are the ones calling for a hard debt ceiling in order to curb the Democratic agenda. However, when the Republicans were in charge of the government they constantly increased the deficit, putting the US into more debt. Despite their cries against it, they realized that in order to avoid economic catastrophe, they needed to extend the debt ceiling. They did so with less than two weeks to default.
This instance does a great job of illustrating the polarization of American political parties. Each wants to spend money to benefit their party objectives, but will throw a fit when the other party tries to do so. I believe that US politicians need to look beyond party lines and do what is best for the greater good of the American people.
5 comments:
It is interesting that both major parties in the US government get upset with each other for behaving in the exact same way. Raising the debt ceiling was definitely the right call because like the post said, not doing so would result in not only economic damage to the United States but also economic damage to the global economy. It is also interesting to note that the world's number one economy runs on such a high deficit but is the first to tell other countries they need to get out of debt.
In this case, it is important to prioritize country over party as economic future depends on paying interest on time. With the growing amount of debt accumulated by the federal government, it is more important than ever to maintain the United States' track record of reliability.
Unfortunately we will most likely have to go through this process again in December as the political battle goes on to hold the debt limit and also stop the federal government from shutting down.
I wonder why does the government impose a debt ceiling on its budget at all? It merely allows the government to borrow money to pay the bills it has already approved. Plus, it can cause catastrophic economic damage if the government went to default only because the debt reached a fixed, arbitrary amount that was proposed by the legislative branch. I mean, you could keep raising the debt ceiling to avoid the consequences, but what is the point then, to have a debt ceiling at all?
Polariztion of political parties is very common within democracies, but both conduct the same measures when it comes to the economy. Hence, the Republicans point of view is of no surprise.
I do agree with Hanna, though- and this is something I had not thought of before. Why impose a debt ceiling at all, especially when it is a manmade limit. I understand wanting to be careful and having certain limits for debt, but it can be a flexible limit in order to avoid default instead of being so fixed.
In addition to this, it has also been rumored that Mitch McConnell will strongly support not lifting the ceiling again if the occasion does arise. It is hard to tell if this is an empty threat that is simply discouraging excess spending, or he will genuinely hold out if the opportunity arises.
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